Section C Business Process Performance Total Quality Management and Activity-Based Management As already discussed, activity-based management principles are widely used to recommend process performance improvements. It is applied to help companies make better strategic decisions, enhance operating performance, reduce costs, and benchmark performance. Activity-based management uses activity-based costing data to trace costs to products and/or individual customers for the purpose of analyzing business process performance. A total quality management system is most compatible with an ABC system because the ABC system makes the costs of quality more apparent. A firm with a good ABC system only needs to modify it to identify costs and activities relating to costs of quality. A company that utilizes ABC will also be continuously identifying activities that can be eliminated, as well as ensuring that necessary activities are carried out efficiently.
Posted on: Tue, 28 Jan 2014 14:36:30 +0000
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